AUSTRIA - The Austrian National Bank and economic researchers agree the fear of not having enough money at retirement will influence saving behaviour more than the current economic crisis, as evidence reveals Austrians are saving more than ever before.
The savings quota of Austrian households has increased from 9.7% to 11.3% of disposable income over the last year, according to statistics gathered by the Austrian National Bank OeNB.
"Never before have we seen a similar increase over one year," the bank noted in a statement.
According to the experts, this is as a result of reforms to the state pension system which started to come into effect in 2003.
It includes a gradual increase of the statutory retirement age for women from 60 at present to match the age 65 requirement for men, along with the removal of the ability to go into early retirement on full pension as well as changes to the calculation of the state pension.
For most people, their best 15 years of income are used to calculate the pension they will receive, along with 2% of the average of these years being multiplied by the total working years.
But under the reform, the 2% will gradually decrease to 1.78% and the pension will be calculated on a 40-year average income rather than picking the best 15 years.
This will lead to an overall decrease in paid-out pensions so people have begun to save privately for their retirement.
The pension reform has also led to an increase in the employment quota of 55 to 64-year-olds which rose from 28.8% in 2004 to 38.7% in 2007.
The OeNB also noted, however, the increase in savings has curtailed people's spending money, which in turn slows down economic growth.
Together with the current financial crisis, this means wages are hardly rising in real terms, according to the economic research institute Wifo, which also forecasts a slight drop in the savings quota - including assets in occupational pension funds - by around 0.2 percentage points for this year.
"Consumption and wages will increase at the same speed and savings will decrease a bit," Karl Aiginger, head of Wifo, told IPE.
However, researchers also believe in an ongoing trend towards more savings over the next years.
Aichinger also pointed out the problems with this year's calculations: "We have little experience with financial crisis of this dimension. We have to check what influence it has on the real economy and so far we can see very little influence."
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